Canadian Home Sales Experience Minor Decline Amid Economic Uncertainty

📅 5 days ago

In August 2026, Canadian home sales saw a slight decrease of 0.7% month-over-month, as the market grapples with economic challenges and changing mortgage rates, according to the Canadian Real Estate Association (CREA).

The Canadian Real Estate Association (CREA) reported a modest decline in home sales for August 2026, with a decrease of 0.7% month-over-month. This drop marks the fourth consecutive month where sales activity and prices have remained relatively stagnant. Compared to the same month last year, actual sales volumes decreased by 6.9%. "Sales activity and price trends were largely unchanged for a fourth consecutive month in August," noted Shaun Cathcart, Senior Economist at CREA. He further pointed out that the broader economic environment has shifted, with the Bank of Canada recently raising concerns about rising inflation risks and questioning the sustainability of the economic growth witnessed in recent months. Borrowers are facing increased fixed mortgage rates attributed to rising bond yields. Additionally, the prospect of another rate hike for variable mortgages is now being factored into market expectations for the remainder of the year. These emerging challenges are anticipated to hinder potential momentum in the housing market as it approaches 2027.
Conversely, new listings saw an uptick of 3.3% month-over-month, breaking a three-month streak of declines. This increase in supply, coupled with a slight reduction in sales, has led to a decrease in the sales-to-new-listings ratio, which fell to 49.1% from 51.1% in July. This figure is below CREA's long-term average of 54.7%. Garry Bhaura, Chair of CREA, commented, "The noticeable increase in new supply in August was both broad based across all the largest markets and most apparent towards the end of the month. This suggests sellers were looking to get an early start to the fall market, particularly given how late Labour Day was this year." For potential buyers, this influx of new properties may provide a wider selection, although they must also navigate a fresh wave of economic uncertainty.
By the end of August, active listings were just under 200,000, aligning closely with seasonal norms and up 1.4% from the previous year. Supply levels have remained largely stable since spring 2025. The months of inventory metric held steady at 4.8 for the fourth month running, slightly below the five-month long-term average. According to CREA's classifications, a figure below 3.6 months indicates a seller's market, while anything above 6.4 signifies a buyer's market.
The National Composite MLS® Home Price Index remained unchanged month-over-month, continuing a period of stability that has persisted since spring—marking the calmest stretch since 2024, when the index recorded no changes throughout the year. Year-over-year comparisons reveal that the non-seasonally adjusted version of the index dropped by 3%, representing the smallest decline since October 2025 and reflecting a narrowing trend that has been evident since January. The national average home price for August was reported at $668,219, reflecting a year-over-year increase of 0.6%.

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